Is Trump Media A 'Pump And Dump' Scheme? Fox News And Fox Business Disagree

Is Trump Media A 'Pump And Dump' Scheme? Fox News And Fox Business Disagree

Charles Gasparino

Donald Trump

Sister channels Fox News Channel and Fox Business Network are usually singing from the same sheet of music when covering the news of the day, in particular as it relates to reporting about their longtime ally and political patron Donald Trump.

Today, however, the two networks deviated markedly during their daytime coverage of the ballooning stock valuation for Trump’s media company, which completed a merger deal last week.

Disgraced former President Donald Trump has enjoyed a financial windfall over the past day. Late Monday morning, a court in New York significantly reduced the bond he owes the state as he appeals a $454 million civil fraud judgment against him, while also extending Trump an additional 10-day grace period to secure a new bond. In response to the news, share prices for Digital World Acquisition Corp., the shell company that just completed its merger with Trump Media & Technology Group (the company that owns Truth Social), surged by the close of trading.

Share prices for Trump’s new company continued climbing Tuesday. At one point, Trump Media shares traded for double what they went for last week, spurring numerous financial publications and business reporters to label the company a “meme stock” — a company whose stock price is driven by viral popularity and thus can be prone to an eventual collapse. Industry experts warned that the stock value is “untethered to its underlying business results” and that there was “no way” the current market price represents “a rational valuation for this company.”

None of these glaring red flags about Trump’s overvalued company were enough to dissuade the cast of characters at Fox News’ Outnumbered from basking in Trump’s good fortune.

After showing critiques of Trump's company that aired on cable rivals CNBC and MSNBC, the Fox team mocked Trump’s critics and celebrated his stock’s performance.

Guest co-host Marc Siegel specifically took umbrage with a description of Trump’s new venture as a “pump and dump” scheme, arguing, “That would mean, by the way, that you deliberately pump up the stock in order to sell a bunch of it off,” but “that’s not what’s happening here.”

According to Siegel, this stock price run-up represents “a real excitement” for “an alternative to the — to one-dimensional media.”

At almost the exact same moment that Siegel was singing Trump Media’s praises on Fox News, Fox Business correspondent Charles Gasparino was throwing cold water at would-be investors, specifically warning that Trump might treat the company as a pump-and-dump scheme.

During an appearance on Cavuto: Coast to Coast, Gasparino first explained that Trump could not sell his shares in the company without “dramatically” undermining the stock’s value and opening the company up to shareholder lawsuits.

He then declaratively warned viewers against investing in the stock at this price, comparing Trump Media to previous meme stocks that were “bid up by irrational exuberance” like AMC, GameStop, and Bed Bath & Beyond, and pointing out that Trump’s social media enterprise has just “one fraction of the users” and revenue of a competitor like Twitter, which notoriously struggled to make money.

Gasparino also took aim at so-called “pumpers” who would recommend purchasing a “meme stock” like this one, saying such a person is “probably a fraud.”

Gasparino warned that “six months from now, [Trump] can just dump all of his shares,” before predicting, “I bet you he dumps a chunk of it.”

Gasparino followed his prediction with a warning that investing in the company should be “scary stuff for the average person.”

He then concluded the segment by again predicting, “I just don’t see him holding on to the stock when he can sell it,” adding, “He knows this thing isn’t making any money.”

Gasparino was not the only Fox Business personality to warn viewers about the underlying fundamentals of Trump’s media venture.

During the next hour, on Fox Business’ The Big Money Show, correspondent Kelly O’Grady explained that analysts say Trump’s company boasted share prices that don’t “represent the underlying business.”

After O’Grady’s segment concluded, co-host Taylor Riggs asked investment analyst Lou Basenese if Trump’s company was “another meme stock that’s divorced from fundamentals,” to which he responded, “Yes, yes, and yes.”

As it turned out, skeptics like Gasparino were right to be worried about the volatile valuation Trump Media was sitting on in the middle of the trading session. After peaking at around $79 per share Tuesday morning, the stock closed at $57.99, a roughly 26 percent intraday decline. Earlier investors, like Trump, still saw their portfolios grow as the stock closed higher than in the days before, but the “average” person drawn to the meme stock today probably lost money.

Reprinted with permission from Media Matters.

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